Analysis of the Current Population Survey data for New York City reveals that the economic growth of the 1990s increased the income of families across the earnings spectrum nationally; however, earnings among families in the top quintile outpaced other quintiles, leading to an increase in income inequality. This inequality was substantially greater in New York state, and income inequality was greater in New York City than in either the state or the nation. Income inequality in New York City was also higher than in other major cities analyzed. Rising income inequality has been spurred by rapid income gains among the top fifth of New Yorkers and stagnant across incomes among the poorest fifth. Low earnings are directly related to low job skills and to households being headed by women. Nearly 30 percent of all New York City families are headed by people with less than an 11th-grade education, and nearly two-thirds of low-income households are headed by women. Policy recommendations include: increase the minimum wage, establish a New York City Earned Income Tax Credit, and invest in the skills of New York City's workforce. (SM)